TREASURY

Finance Bill 2014: Measures with Immediate Effect

David Gauke: This Government are committed to delivering a tax system that is fair and promotes growth and competitiveness.
	The Government are today announcing measures to help tackle tax avoidance and support investment. The legislation for these measures will have effect from today and will be included in Finance Bill 2014.
	Debt cap
	The Government are introducing legislation to counter the potential exploitation of the worldwide debt cap by putting beyond doubt the way the grouping rules apply to companies without share capital.
	Controlled foreign companies: profit shifting
	The Government are introducing legislation to switch off the full and partial exemption rules for loan relationship credits of a controlled foreign company that arise from an arrangement with a main purpose of transferring profits from existing intra-group lending out of the UK. The measure also amends the anti-avoidance rule relating to the transfer of external debt to the UK.
	Partnerships review
	The Government are introducing anti-forestalling rules to prevent avoidance of legislation concerning partnerships that include both individual and non-individual partners—mixed membership partnerships. The substantive legislation on mixed membership partnerships will have effect from 6 April 2014, but the anti-forestalling rules apply from 5 December 2013.
	Avoidance scheme using total return swaps
	The Government are introducing legislation to counter tax avoidance schemes that use derivatives to reduce a company’s liability to corporation tax, including, but not limited to, arrangements involving total return swaps.
	Double taxation relief: revenue protection
	The Government are introducing legislation making two changes that reinforce the UK’s double taxation relief policy that relief for foreign tax should only be given where income has been doubly taxed: once in the UK and once in the foreign territory. One change closes avoidance opportunities by strengthening the provision which ensures that tax credit in the UK is reduced if foreign tax is repaid by a tax authority to a person other than the person entitled to the credit. The second change prevents any avoidance opportunities which seek to exploit mismatches between the UK’s rules and the rules of foreign jurisdictions where a disproportionate amount of UK tax relief is claimed in respect of foreign tax in relation to non-trading loan relationships.
	Further details on the measures listed above are contained in the draft legislation, explanatory notes and tax information and impact notes published on the gov.uk website.

National Insurance Contributions Bill

David Gauke: The Government are tabling an amendment to the National Insurance Contributions Bill today ahead of Report and Third Reading of the Bill on 10 December 2013.
	As the Chancellor made clear during the autumn statement, for the first time employers will not be required to pay employer class 1 NICs in respect of the wages they pay to employees under the age of 21 up to the equivalent of the upper earnings limit. The Government believe that this measure will make it cheaper to employ those under the age of 21 and support almost 1.5 million young people currently in employment. It will apply both to new and existing employees that are under 21 years of age with effect from 6 April 2015.
	I am placing copies of the commentary on the amendments and tax information impact note in the Libraries of both Houses. I have also deposited these documents for the amendments to the partnerships provisions in the Bill.

CULTURE MEDIA AND SPORT

Telecommunications Council

Edward Vaizey: The Telecommunications Council will take place in Brussels on 5 December 2013. The Deputy Permanent Representative to the EU, Shan Morgan, will represent the UK at this Council.
	The first item is a progress report from the presidency on the proposal for a directive of the European Parliament and of the Council concerning measures to ensure a high level of network and information security across the Union (first reading—EM6342/13). It is unlikely that any detailed discussion will take place. However, should it be required, any UK intervention will note that while UK welcomes the Commission’s overarching ambition to raise cyber capabilities across the EU, UK wants to ensure that any legislative agreement does not place disproportionate burdens on businesses or public administrations; or create the wrong incentives for sharing information.
	The second item is a progress report on the proposal for a regulation of the European Parliament and of the Council on measures to reduce the costs of deploying high-speed electronic communications networks (first reading—EM7999/13). If there is a debate, the UK will state that while UK strongly supports the Commission’s overall objective to support broadband roll-out by reducing the cost of deployment, we do not think that the use of a regulation is the best way to achieve this, reaffirming our view that a directive would be a more appropriate instrument in that it would give member states more scope to implement relevant cost-reducing measures in a proportionate, flexible and cost-effective manner.
	The Council will take part in an “orientation debate” guided by a paper and two questions from the presidency. The first question relates to the proposal for a regulation of the European Parliament and of the Council laying
	down measures concerning the European single market for electronic communications and to achieve a connected continent (first reading—EM13562/13 and 13555/13 + ADDs 1-2). It asks member states to indicate what actions contained in the proposal they regard as priorities; and whether it is appropriate to carry out such actions at EU or member state level. The main points of the UK intervention will include: a view that while UK welcomes the objectives of the proposal, we remain concerned that the link between the stated aims and the constituent elements of the package remain unclear or unproven in a number of circumstances; signal, our support for action at EU level for the pro-consumer parts of that package; support for the eventual reduction of the EU roaming rates to zero; and support for proposals that could accelerate the roll-out of new technologies across the EU. Finally, we will state that we do not support the proposals laid out in the package that would give the Commission further competency over spectrum management nor those that would result in the introduction of regulation covering issues relating to net neutrality.
	The second question considers the conclusions of the October European Council that covered several aspects of the digital economy—for example, cloud computing, big data and digital platforms—that are currently either unregulated or rely on “soft” regulation. In this question, the presidency asks if any regulatory framework is required in these areas and, again, whether any regulation should be at member state or EU level. The UK’s intervention will state that while UK agrees fully with the conclusions in that the digital economy has the potential to drive innovation, growth and jobs across the EU, UK does not believe that the European Council conclusions call for a new regulatory framework nor does UK consider that one is required.
	There are two items under AOB, neither of which are likely to require an intervention. The first item is an update from the presidency on the proposal for a regulation of the European Parliament and of the Council on guidelines for trans-European telecommunications networks and repealing decision No. 1336/97/EC (first reading—EMI6006/11); the second item is an update from the presidency on the proposal for a regulation of the European Parliament and of the Council on electronic identification and trust services for electronic transactions in the internal market (first reading—EM10977/12).
	Finally, the Greek delegation will inform the Council of their priorities for their forthcoming presidency before Council adjourns until the next meeting in June 2014.

DEFENCE

Defence Reform

Philip Hammond: The noble Lord Levene of Portsoken has conducted his second annual review of implementation by the Ministry of Defence of his defence reform report of June 2011, and has written to me setting out his conclusions, providing an independent view of my Department’s progress in implementing the recommendations. I am placing a copy of Lord Levene’s letter in the Library of the House, together with the MOD’s summary of progress against the 53 recommendations in his original report.
	I welcome Lord Levene’s recognition of the substantial progress made since his last review in implementing both the letter and the spirit of his recommendations. His finding of clear evidence that the Ministry of Defence has become more business-like and finance-focused is very encouraging, and reflects the wide-ranging changes we have put in place under defence reform, a key part of which was the balancing the MOD budget in 2012. The elimination of the inherited imbalance in the defence budget is described as “remarkable” and an illustration of how a Government Department can be managed effectively when it has strong political leadership.
	Lord Levene points out how the MOD head office has reduced in size by some 500 posts and is becoming much more strategic in its approach. The implementation of the delegated finance and capability operating model in April 2013, fulfilling one of Lord Levene’s key recommendations, has increased empowerment of the service chiefs and improved accountability. These changes, coupled with the full operating capability of the new Joint Forces Command, are highlighted by Lord Levene as successful examples of implementation of his recommendations.
	With the key structural and process changes now complete, I fully acknowledge the need to maintain momentum, particularly in the area of behavioural change, as well as the continued development of the head office, improvements in management information and the implementation of the matériel strategy. We are making steady progress in the implementation of the change agenda in all of these areas.
	The Ministry of Defence is committed to sustaining and building on the changes already made. I am grateful to Lord Levene for his continued support in this important work.

HEALTH

Employment, Social Policy, Health and Consumer Affairs Council

Jane Ellison: The Employment, Social Policy, Health and Consumer Affairs Council will meet on 9-10 December in Brussels. The Health and Consumer Affairs part of the Council will be on 10 December.
	The main agenda items will be the following:
	Medical devices regulations (where the presidency will report progress on negotiations and ask for an exchange of views); and
	adoption of Council conclusions on reflection process on modern, responsive and sustainable health systems.
	Under any other business, the presidency will provide information on the tobacco products directive, the clinical trials directive and the regulation on fees payable to the EMA for pharmacovigilance activities. The Commission will provide information on the transposition of the cross- border healthcare directive information and the joint procurement agreement on medical countermeasures. The Italian delegation will raise UK front of pack (FoP) nutrition labelling.
	The Greek delegation will also give information on the priorities for their forthcoming presidency, which will run from January until July 2014.

WORK AND PENSIONS

Universal Credit

Iain Duncan Smith: Today I announce our plans for the next stage of implementing universal credit.
	Universal credit is a major reform which will transform the welfare state in Britain for the better. Once fully implemented, universal credit will account for £70 billion of benefit spending each year, and bring a £38 billion economic benefit to society over 10 years.
	Rightly for a programme of this scale, the Government’s priority has been, and continues to be, its safe and secure delivery. This has already been demonstrated in our approach to date, which started with the successful launch of the pathfinder six months earlier than planned in April 2013, and has continued with the controlled expansion of universal credit, starting in October 2013 and running through to spring 2014.
	Furthermore, we are already pushing ahead with the cultural and business change required as part of universal credit: retraining 25,000 Jobcentre Plus advisers; delivering 11 in-work progression pilots; and rolling out the new claimant commitment, which is on track to be in place in all jobcentres by March 2014.
	Over recent months the Department has worked with the Government Digital Service to assess the options
	for the next stage of universal credit delivery. That work has explored the use of the latest digital technologies and also assessed the utility of the work we have done to date, through the universal credit pathfinder, going forward.
	Today I can announce the conclusions from this work:
	As part of the wider transformation in the development of digital services, the Department will further develop the work started by the Government Digital Services to test and implement an enhanced online digital service, which will be capable of delivering the full scope of universal credit and make provision for all claimant types.
	Meanwhile, we will expand our current pathfinder service and develop functionality so that from next summer we progressively start to take claims for universal credit from couples and, in the autumn, from families. Once safely tested in the 10 live universal credit areas, we will also expand the roll-out to cover more of the north-west of England. This will enable us to learn from the live running of universal credit at scale and for more claimant types, including the more vulnerable and complex.
	These steps continue our progressive approach—test, learn, implement—as we deliver this flagship programme.
	Our current planning assumption is that the universal credit service will be fully available in each part of Great Britain during 2016, having closed down new claims to the legacy benefits it replaced; with the majority of the remaining legacy case load moving to universal credit during 2016 and 2017. Final decisions on these elements of the programme will be informed by the development of the enhanced digital solution.